Dr. Clayton Chau, a former county Health Care Agency psychiatrist who is now a high-ranking CalOptima official, received at least $149,000 in speaking fees from pharmaceutical companies in recent years, including $84,250 in apparent violation of an agency policy against accepting such payments, according to a Voice of OC investigation.

Most of the payments to Chau came from London-based AstraZeneca, which manufactures a top-selling antipsychotic drug that is on the formulary of the Health Care Agency or HCA. The formulary lists medications that may be prescribed by county doctors. Chau also received speaking fees from Eli Lilly, another firm with lucrative drugs on the formulary.

It’s legal for doctors to accept speaking fees from pharmaceutical companies, but the practice is controversial. There are increasing concerns that doctors who receive large speaking fees from a company will feel some level of pressure to prescribe that company’s drug over others in its class.

“I’ve never heard a good argument for doctors taking pharma money,” said Carl Elliott, a bioethicist at the University of Minnesota. “It’s a conflict of interest, pure and simple.”

Chau had prescribing power, but it is unclear whether he prescribed AstraZeneca or Eli Lilly drugs to his county patients. He was not on the HCA formulary committee, which ultimately decides what medications may be prescribed.

Chau told Voice of OC he stopped accepting fees from drug companies in 2012 after the HCA adopted a policy prohibiting the practice.

“When the county said, ‘Stop doing it,’ I stopped,” Chau said during an interview. “I no longer speak for any drug company.”

But according to county records, the ban on doctors taking speaking fees and other outside income actually went into effect three years earlier in September 2009.

Chau did not return reporters’ calls and emails regarding the discrepancy. Through a CalOptima spokeswoman, he said he heard about the new policy from a colleague.

Chau, 48, was among 60 doctors, including 40 psychiatrists, employed by the HCA. In addition, 46 more doctors, including 21 psychiatrists, have contracts with the agency. The psychiatrists treat patients in the jails, outpatient clinics and through community outreach.

HCA officials said they learned of Chau’s outside income earlier this year, but at that point Chau was already in his new job at CalOptima, the county’s health plan for poor, elderly and disabled residents. HCA couldn’t take action against him if he did violate the policy, officials said.

Agency doctors are allowed to apply for a waiver of the policy, and Chau was granted two waivers for outside work — one in 2009 shortly after the policy on outside income went into effect and another in early 2012.

However, neither of the waivers submitted by Chau mentions payments from pharmaceutical companies.

The waiver requests, which are signed by the doctor who submits them, reaffirm the agency’s policy prohibiting the use of a county position “for the private gain or advantage of myself or others.”

“Dr. Chau never specifically asked for permission to speak on behalf of or accept payment from pharmaceutical companies,” wrote HCA spokeswoman Deanne Thompson in an email.”The Health Care Agency was unaware of these activities.”

Furthermore, HCA Director Mark Refowitz, who was head of the agency’s Behavioral Health Department at the time Chau was receiving speaking fees, said he had no knowledge of Chau’s outside work.

“He told me nothing,” said Refowitz in a brief interview. “He never told me or asked permission to do something for a pharmaceutical company.”

A follow-up email from Thompson stated Chau did ask Refowitz for permission to participate in unpaid speaking engagements but never for events sponsored by drug companies.

“To our knowledge no one at HCA was aware of this issue until February 2013,” Thompson wrote.

According to the agency’s policy, one of its primary purposes was to “avoid the appearance of actual or potential conflict of interest between county employment and outside employment or affiliations.”

On his requests for a waiver, called a disclosure statement, Chau listed “Clayton Chau MD Inc” as one outside employer in 2009, saying income came from “conducting seminars and trainings.” The work, he reported, was done “occasionally, evenings.”

Both requests for waivers list his memberships on advisory boards or volunteer teaching at UC Irvine.

In January 2012, he reported his work through Clayton Chau MD Inc at his Westminster home address involved “training to psychiatric groups and nurse practitioner groups on mental health diagnosis and treatment updates.”

A Lucrative Side Job

Chau, who was born in Vietnam and fled with his family after the North Vietnamese took over, has been honored for his mental health outreach to homeless, ethnic and lesbian, gay, bisexual and transgender communities in Orange County.

Drawing on his experience as a Vietnamese refugee and struggle with suicide, Chau works with primary care physicians to help them identify symptoms of post-traumatic stress disorder in older Vietnamese patients. His personal journey was featured in a 2011 PBS documentary series, “Profiles of Hope.”

According to records searchable on the AstraZeneca website, the drug manufacturer paid Chau a total of $84,250 from 2010 through 2012, after the HCA policy was in effect.

The company’s antipsychotic drug, which is sold under the brand name Seroquel, was the sixth best-selling drug in the U.S in 2011. Seroquel typically is used to treat schizophrenia and bipolar disorder but increasingly is being prescribed for other nonpsychotic conditions.

Chau began working for the Behavioral Health Department in 2000. In December 2012, he transferred to CalOptima and now is its director of Behavioral Health. Refowitz is chairman of CalOptima’s board.

Chau’s base salary at the HCA was $177,611, plus an additional $18,480 a year as a special-assignment doctor. At CalOptima, his annual salary is $242,000.

Questionable Filings

Before 2010, Chau reported speaking fees from pharmaceutical companies on state conflict-of-interest forms he was required to file as a member of the Health Care Agency’s HIV Planning Council.

Thompson noted those reports, known as Form 700, are filed with the county clerk and are not reviewed by HCA supervisors. “There is no formal process for HCA to review Forms 700 filed by HCA staff,” she said.

Altogether, from 2008 through 2012, based on reports from the drug companies and self-reported information, Chau received at least $104,250 from AstraZeneca and another $45,250 from Eli Lilly, the pharmaceutical giant based in Indianapolis.

Chau opened a private medical practice in 2004 while working part time as a county psychiatrist, then went to work full time for the county in 2007. In 2008 and 2009 he listed AstraZeneca and Eli Lilly as sources of income on his 700 form, reporting at least $10,000 in payments from each company in both of those years.

But starting with his reports of income earned in 2010 — a year after the health agency’s ban went into effect — Chau stopped listing the companies and refers to outside income as “honorarium” paid to him at his home address. He doesn’t list the sources of the honorarium.

In December 2012, when Chau filed his economic interest form for his job at CalOptima, he said he had no reportable outside income that year, even though AstraZeneca listed speaking payments to Chau of $11,350.

Since 1975, California’s Fair Political Practices Commission has required elected officials and commission members such as Chau to disclose information about sources of income, investments, business positions, real property holdings and gifts.

Bob Stern, who along with then California Secretary of State Jerry Brown, wrote the 1974 ballot proposition that created the state FPPC and was its first general counsel, said there is no difference between “honorarium” and “speaking fees.”

“It’s obviously the same thing,” Stern said.

He said the economic disclosure forms were created so the public could see potential conflicts of interest, such as using one’s official position to leverage a source of income.

“You’re supposed to list fees from the companies that are likely to be a conflict of interest, because those are the ones who are likely to give you speaking fees,” said Stern.

Misleading Marketing

Over the last decade the relationship between physicians and drug manufacturers has come under increasing scrutiny.

According to the nonprofit investigative news agency ProPublica, last year five pharmaceutical companies paid almost $5.5 billion in fines to settle allegations by the U.S. Department of Justice of fraudulent and misleading marketing practices.

Many drug manufacturers voluntarily have started to disclose their payments to doctors by posting the information on their websites. Disclosures for 15 of these companies have been compiled into an online database by ProPublica, with records from some firms going as far back as 2009.

Starting in August, under new provisions in the Affordable Care Act, drug companies doing business in the U.S. will be required to record their speaking fees and other payments to doctors. By March 2014, they must report this information to the federal government, which will eventually make it publicly available online.

Elliott, the University of Minnesota bioethicist currently researching pharmaceutical industry corruption, disputes the claim that industry-funded events have educational value.

“It’s always marketing,” said Elliott. “What interest does a drug company have in educating doctors? Education is the drug company code word for marketing.”

Elliott speculated there are two reasons why a drug manufacturer might choose one doctor over another for an event. For one, he said, companies often target doctors with lucrative patient populations or “high-prescribers” with the hope that doctors will prescribe their drug more often.

“Second, if he’s working for a large, third-party payer, there’s another possible reason to want to funnel money to him, which would relate to the kind of administrative decisions he makes,” said Elliott.

While Chau didn’t serve on the HCA’s formulary committee, it’s unclear whether he provided advice or suggestions on drug selection in addition to writing prescriptions.

One survey of research in 2000, “Physicians and the pharmaceutical industry: is a gift ever just a gift?” by Dr. Ashley Wazana of McGill University, found that interacting with drug companies could affect a physician’s behavior and the drugs they prescribe.

Wazana found that across several studies, accepting sponsored meals, travel stipends to attend symposiums, honorariums and research funding were all shown to be associated with increased formulary requests for the sponsor’s drug.

According to The Wall Street Journal, some of the largest drug makers have decreased spending on physicians in the last few years, with Pfizer cutting spending on expert forums by 60 percent in 2012. AstraZeneca, on the other hand, increased payments to doctors, according to the Journal.

Pharmaceutical Research and Manufacturers of America or PhRMA, an industry lobby, has argued that educational events and outreach can help physicians learn about important new research and treatments.

PhRMA maintains a voluntary code of ethics for its members. If a company adopts the code, it would be prohibited to make noneducational gifts and would require paid speakers who serve on formulary committees to disclose their activity.

The U.S. Food and Drug Administration regulates industry-funded speaking events to some degree. According to FDA spokeswoman Andrea Fischer, if a company writes the content of its presentation, it’s considered a promotional activity, and the company is required to submit the content to the FDA for review before its first use. The FDA does not fine sponsors for violating advertising regulations.

But even with the new physician payment “sunshine” law set to take effect next year, Elliott said, he sides with critics who call for payments from drug companies to doctors to stop altogether.

The law “is better than nothing,” said Elliott. “But the problem with sunshine laws is all they do is tell you where the money is going, but they don’t prevent the money from getting to doctors. And in the end, it’s the money that’s the problem, not the secrecy.”